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					                    Entrepreneurship – Ashesi University Case Analysis 1




ENTREPRENEURSHIP – ASHESI UNIVERSITY CASE ANALYSIS



                         by
                    RKC MBA Student




             Presented to Prof. Francois Therin

                   Applied Leadership
        Robert Kennedy College, University of Wales

                      March 4, 2010

                     Word count: 3969
                                                              Entrepreneurship – Ashesi University Case Analysis 2


                                                                Table of content

1. EXECUTIVE SUMMARY ...................................................................................................................... 3
2. STATEMENT OF PROBLEM ............................................................................................................... 4
3. CAUSES OF THE PROBLEM ............................................................................................................... 5
4. DECISION CRITERIA AND ALTERNATIVE SOLUTIONS............................................................ 7
    4.1 KEY DECISION CRITERIA ...................................................................................................................... 7
    4.3 ALTERNATIVE SOLUTION-1: PUTTING ASSETS IN-HAND INTO FULL USE ............................................... 8
    4.4 ALTERNATIVE SOLUTION-2: FUNDING FROM ALTERNATE SOURCES ...................................................... 8
    4.5 ALTERNATIVE SOLUTION-3: RUNNING TWO SHIFTS OR SHORT TERM PROFESSIONAL MODULES ............ 9
5. RECOMMENDED SOLUTION, IMPLEMENTATION AND JUSTIFICATION ..........................10
    5.1 IMMEDIATE SOLUTION .........................................................................................................................10
    5.2 FUTURE SOLUTION ..............................................................................................................................11
6. CONCLUSION ........................................................................................................................................12
7. BIBLIOGRAPHY....................................................................................................................................13
8. EXHIBITS ................................................................................................................................................14
    8.1 2002-07 DONOR SUPPORT / FUND RAISING TREND .............................................................................14
    8.2 2005-07 FINANCIAL AID TO STUDENTS & 2008-13 PROJECTION .........................................................14
    8.3 2002-13 TUITION FEE & OTHER INCOME TREND .................................................................................15
    8.4 2008-13 EXPENSE VERSUS STUDENT STRENGTH TREND......................................................................15
    8.5 2008-13 TUITION FEE VERSUS STUDENT STRENGTH TREND ................................................................16
    8.6 2008-12 TUITION FEE PROJECTION ......................................................................................................16
    8.7 ALTERNATE OPTION -1: PUTTING ALL ASSETS INTO FULL USE .............................................................16
    8.8 ALTERNATE OPTION -2: FUNDING FROM ALTERNATE SOURCES ..........................................................17
    8.9 ALTERNATE OPTION -3: RUNNING TWO SHIFTS ...................................................................................18
                                     Entrepreneurship – Ashesi University Case Analysis 3



                            1. Executive Summary

       This case analyzes the Ashesi University and its Founder and President, Patrick
Awuah‘s journey as a social entrepreneur and the current dilemmas faced by Patrick and
his team. As Bhide (1999:3) says the problem entrepreneurs confront everyday would
overwhelm most in the corporate leadership. In business, the rich rate of returns will
serve as a motivation to keep the entrepreneur motivated. In a Social Entrepreneurship
scenario, the rate of return and most of financial aspects doesn‘t apply. It is the sheer will
to serve the community and a greater cause for the mankind that drives a social
entrepreneur. Again, that alone will not be enough to allow a business entity to sustain,
whether it is for profit or non-profit. Ashesi University and its founder Patrick‘s current
dilemma and situation are some what similar.
         Patrick who grew up in Ghana and educated in American liberal arts with full
scholarship wanted to provide a similar opportunity to every eligible student in Ghana
and Africa and thereby build a new generation of entrepreneurs, political and business
leaders with right mix of western-styled and liberal arts education. After working for
eight years in one of the world class corporate organization, he quit the well paid job with
Microsoft to pursue his dream. Instead of jumping straight into execution, he took two
years MBA program to prepare himself to effectively run an organization. Patrick applied
the learning from his MBA program to give shape to his dream. He used his high quality
private university dream project as the case for his MBA feasibility study project by
involving his fellow students and thereby giving shape to a detailed business plan that
was assessed and analyzed by experts in the university. This helped him to realize that the
not-for-profit enterprise like his may not attract private investors or doesn‘t allow him to
take the routes like IPO, venture capitalist or other traditional funding sources.
         Patrick used his friends and contacts in Microsoft to rise funding for his ambitious
project. After years of planning and overcoming various stumbling blocks, Ashesi started
its first class with 31 students successfully on 04th March 2002 with approval from
National Accreditation Board of Ghana. It took almost five years for Awuah to achieve
this goal after he left his well paid job in Microsoft. That gives an indication on how
much patience and endurance one needs to give shape to a social enterprise. However, it
was just the beginning and not the end. In short term, Patrick‘s aim was to address the
needs of 400 students and in long term 1200 to 2000 students with own campus and
residential facilities. This will call for another $28.6 million in investments
approximately. Of the $28.6 million, they need to raise $7.2 million in three years time.
This is a daunting task and calls for new ways and approach to raise funds given they
only managed to raise $3.9 million in donations over the last eight years.
        That‘s not all. Awuah wanted to replicate his model across Africa with the help of
similar committed like minded local entrepreneurs through a franchise model. However,
this goal will take back seat given the immediate need to stabilize Ashesi‘s operations in
Ghana. He needs to the address the expansion as well as academic dishonesty, cheating
and student plagiarism related issues. He needs to work out ways to take control of those
two issues as they will define how Ashesi will shape in future.
                                   Entrepreneurship – Ashesi University Case Analysis 4


                          2. Statement of Problem

       Patrick is at an important junction in his social entrepreneurship journey and he is
faced with number of challenges that he needs to overcome in order to make his private
university model a sustainable and world class one. Let‘s take a look at the issues that is
daunting Patrick and his team in Ashesi at present:
      1. Raising $7.2 million to fund the first phase of construction for permanent
         campus in three years time
      2. Shifting timeline in replicating the Ashesi model across Africa
      3. Committing and standing by the non-profit approach and yet developing a
         sustainable financial model
      4. No support from major Philanthropic organizations
      5. Majority of the funding came from only individuals and small family
         foundations, with 90% of it coming from same top 10 donors of mostly
         Microsoft community
      6. Lack of pure science and engineering program in Ashesi resulting in not able to
         draw the top premiere students
      7. Increasing number of academic dishonesty issues contradicting with
         university‘s mission
      8. Immediate challenge of proctors‘ shortage to monitor the final exam
        Although the academic dishonesty and proctor shortage issues are short term, it
needs to be addressed swiftly else these issues will create a dent in Ashesi‘s mission and
image and may even lead to the collapse of the institution. Given the uniqueness of
Ashesi‘s mission and nature of challenge, Patrick and team needs to give equal focus on
both short and long term issues and may need to take an approach or a path that was
never tested or tried in the academic or social entrepreneurial world.
                                 Entrepreneurship – Ashesi University Case Analysis 5


                       3. Causes of the Problem

      The biggest challenge that Patrick and his partner have been facing from day one
is raising the required capital. This is also the reason behind the 5 out of 8 problems
listed in section 2. The detailed feasibility study done by Patrick & his MBA team
mates did bring out the challenges a non-profit entrepreneurial organization will face in
terms of raising capital. As analyzed by Patrick very early in the journey, the capital
has to be raised by themselves through fund raisers as it is almost impossible to take
the traditional routes like bank loans, IPO, private investors or venture capitalist.
Patrick‘s move to stay back in Seattle to raise the necessary capital from his friends in
Microsoft community is a good move and helped them to stay afloat for several years
now and get started. However, they need to do more to expand the donor base outside
Seattle Microsoft community. There is no direct evidence in the case study to suggest
that Patrick and team have engaged any innovative fund raising approach to support
this unique social cause of providing high quality Higher Education opportunity at a
reasonable cost. In fact, the financial statement clearly shows the donor support has
been declining from $591K in 2002 to $339K in 2007 (see Exhibit 8.1). Ashesi team
needs to engage more like minded global supporters to expand their base.
      For example, World Bank, UN and several other global organizations have
similar fund for African Nation welfare mainly focused on education. World Bank has
donated $45 million for tertiary education only in Ghana from 1993-98 (source:
www.un.org). Similarly, United Negro College Fund (UNCF), a non-profit
organization based in North America has raised more than $3 billion dollars in fund
(source: www.uncf.org) to support African American higher education opportunities in
Unites States. UNCF also has ties with many established corporate sponsors, who have
committed themselves for this cause. A similar sharing arrangement of some sort can
be explored by Ashesi. As an ex-Microsoft employee, Patrick can also approach his
friends‘ network to get Gates Millennium Scholarship for his students and thereby
reducing the amount being spent as financial aid. This will help them to save more than
$0.5 million dollars per year - $396K in 2007 and projected to reach $816K in 2013
(see Exhibit 8.2). This option alone will help Ashesi to save $4.0 million dollars over
the next six years as per projections provided for the period 2008-12 (see Exhibit 8.2).
Though the effort to get large funding from established foundations like Rockefeller or
Ford didn‘t produce any result, they should look for alternates like establishing a
student scholarship arrangement with such institutions for their students as this will
help to reduce the financial aid cost component considerably.
      If the capital and funding issue is taken care, the other issues like expansion,
dependency on small group of donors and sustainable financial model without
compromising non-profit status can be addressed easily. An improved financial
position with guaranteed cash flow is key to the top four problems listed in section 2.0.
The improved financial position will enable Ashesi to expand their academic programs
beyond management information system and business management programs. It will
also enable Ashesi to engage top secondary schools in Ghana into a joint academic
program and attract their top students directly into Ashesi programs. Today, Ashesi
                                  Entrepreneurship – Ashesi University Case Analysis 6


team is engaged into addressing the basic needs and left with no bandwidth or resource
to expand or reach out to wider community.
      Of all the problems highlighted, the academic fraud is the one that should be of
grave concern and needs the most attention. It may not matter how much capital and
fund the organization can rise once this area has gone out of control. If the problem
persists, Ashesi will lose its name, fame and uniqueness and thereby the fund raising
abilities as well. As highlighted in the case, there is a disjoint between the Ashesi‘s
mission and the growing numbers of youngsters joining it in recent years. While they
all would have read or heard about the goal and uniqueness of Ashesi, when it comes to
its application, the environment and policies didn‘t impose it sufficiently on the day-to-
day student activities. This is similar to corporations building common work culture
and values through policies and programs. Patrick‘s ‗no proctor‘ policy, if
implemented, will create a stir in the local and global community. It will be even better
if the student community adopts this as their code of honor rather than the university
imposing it on students. What appears to be a threat to Ashesi also brings a unique
opportunity to distinguish Ashesi from rest in the academic world. Patrick and team
are in a unique position to make history due to the uniqueness they have always
maintained in all levels of the university.
                                    Entrepreneurship – Ashesi University Case Analysis 7


         4. Decision Criteria and Alternative Solutions

        In the previous sections, we discussed the list of problems, underlying data, and
key drivers for each of the problem. A deep analysis of various financial trends including
administrative expenses, tuition fee per student, total income from tuition fee and student
strength will reveal (see Exhibit 8.1 to 8.6) that there are more than one ways to address
the top issue, that is raising sufficient capital for the first phase of the building and
establishing a steady flow of cash to Ashesi. Prior to addressing various options, the
mission and decision criteria must be clearly established to enable decision making when
there are multiple attractive offers on the table but calls for change in approach/mission
of Ashesi. As Bhide (1999:153) says the great challenge for entrepreneurs is not to raise
the money but to have the wits and hustle to go without it.

4.1 Key Decision Criteria
        Ashesi was started with unique vision, mission and funding structure and there are
certain values that has already become part of its fundamentals and they will not be
compromised when any business decision is to be made by Patrick and team. These
unique values have already made Ashesi famous in the industry though it has operated
only for a short period. The key decision criteria are listed below:
    1. Offer a western-style liberal arts post-secondary program to bright and motivated
        young Ghanaians, helping mold the country‘s next generation of leaders
    2. The mission of the school is ―to train a new generation of African leaders who
        excel in scholarship, entrepreneurial leadership, and citizenship‖ and ―to cultivate
        life-long learning, concern for others, and the courage to think new thoughts‖
    3. Ashesi student body to be representative of the Ghanaian—and African—
        population, with all its diversity, and, to make sure this happens the student
        financial aid program will always be there
    4. Maintain the highest academic standard available in Ghana by placing high
        priority on attracting the best faculty possible, giving high priority to teaching
        excellence, and providing a strong liberal arts curriculum appropriately bolstered
        by the use of technology
    5. Priority on providing practical experience to its students, through extensive use of
        class projects that give students the opportunity to analyze and solve real-world
        problems
    6. Remain engaged in the community and seek to nurture a strong sense of
        community among students through community service project and on-campus
        housing for students
    7. Great importance to ensuring equal participation by men and women and use
        scholarships as a tool for ensuring a balanced student population
    8. Maintenance of high ethical standards within its student body, faculty, and
        administration
    9. Administrative function of the school will have a decidedly business tone and will
        pay particular attention to financial management and business strategy
                                    Entrepreneurship – Ashesi University Case Analysis 8


4.3 Alternative solution-1: Putting Assets in-hand into full use
        Given Accra is the capital of Ghana and most populous city, an alternate for fund
raising would be to enter into a commercial agreement like leasing with a local or global
real estate giant to transform the 100 acres obtained in 2002 for the college into a model
town with various facilities including commercial establishments, corporate presence and
cover the various phases of university build from the rental and leased income generated.
Ashesi should consider selling the excess space or free-up some space for sale by
building multi-storey and thereby raise capital for the initial build phase. This option will
not compromise any of the decision criteria and yet get the first phase of the project
launched quickly. This combined with savings established from getting the student
scholar fee covered by prominent foundations, as suggested in section 3.0, will bring-in
another $ 2-3 million over a period of 3-5 years.
      1 Acre in Accra Suburbs: $100,000 approx (source: homesale.co.uk)
      Sell 50 Acres : $5 million approx can be raised
      Build the premises in 50 Acres
           o Option-1: Build, Operate & Transfer: Ashesi will pay rental to builder
             until transfer period of 5 to 10 years.
           o Option-2: Build as per Ashesi specifications with banks, eateries,
             corporate presence to generate rental income. Secure a loan of $3-5
             million on land, construction and rental and tuition fee projections
       As shown in Exhibit 8.7, by using the above options if Ashesi goes aggressive to
expand the capacity to 2000 students within 5 years, it will be able to clear the capital
debts and turn profit much faster than projected. Again, this effort should be combined
with getting the large institutions and foundations to cover the student aids portion in the
form of scholarship fees. The team also needs to maintain the current donor support and
fund raising effort. If the effort can be improved they can turn green in financial long
before the projected 5-6 years timeline. Ashesi should consider using their two other
main assets – students and faculty. By involving them in industrial and business projects
that matters for business community and corporate, the university can generate funds and
provide community service as well.

4.4 Alternative solution-2: Funding from alternate sources
        While maintaining the momentum on fund raising effort with individuals, Ashesi
should also work on other alternatives like local or international NGO groups or local
government. Such institution‘s support can come in the form of interest free or low
interest loans to support the building fund and not necessarily as donation. As per Exhibit
8.8, the additional capacity of 400 students will generate a net surplus of $2.4 to 4.0
million dollars. In addition, there will be a savings of $1.5 million that is currently being
spent on real estate. The above projections combined with Ashesi current standing in the
country will help to get the necessary funding from large government or NGO bodies.
The below calculation assumes 400 seats can be accommodated in year-1 and another
400 in year-2. If this additional capacity of 400 students can be repeated for subsequent
years until the max capacity of 2000 is reached in year-5, Ashesi will be able to generate
                                    Entrepreneurship – Ashesi University Case Analysis 9


additional $6.0 million dollars based on its current operating model as assessed in Exhibit
8.1 to 8.8. That‘s a total of $11.5 million dollars in 5 years period.

          Savings from Real Estate (for base 400 capacity): $300,000*5 = $1.5 million
          Savings from Additional 400 capacity (total 800): $600,000~1,000,000 *4
           Years = $2.4 million ~ 4 million
          Savings from Additional 400 capacity(total 1200): $600,000~1,000,000 * 3
           Years = $1.8 million ~ 3 million
          Savings from Additional 400 capacity(total 1600): $600,000~1,000,000 * 2
           Years = $1.2 million ~ 2 million
          Savings from Additional 400 capacity(total 2000): $600,000~1,000,000 *
           1Year = $0.6 million ~ 1 million
        In addition, Ashesi should consider engaging a professional fund raising body
specialized in the academic cause. They will be able to narrow the search quickly from
their past experience and donor profiles. Further, such arrangement can be worked out
based on a fee of the donation collected so that institution doesn‘t have to incur any
additional cost to engage such services.

4.5 Alternative solution-3: Running two shifts or short term
professional modules
        Given the need for generating additional capital and constraints in real estate, the
university can run a two shift approach with 400 students in each session with additional
faculty staff. As shown in Exhibit 8.8, this option will generate $11million dollars over a
period of 6 years to Ashesi. In addition, the university can also start short term
professional courses and generate additional income using its current facility and faculty.
This solution will be sufficient to generate the required capital to support the first two
phases of building. When Phase-1 is completed in 24 months, it will produce additional
600 students‘ capacity and Ashesi can continue to operate from old premises as well as
new premises in addition to the two shift approach and this will generate anywhere
between 1400 (double shift in old premises only) to 2000 (double shift in both new and
old premises) students capacity and a potential of 20 million dollars or more can be
generated using this approach. This will help to cover all of the $28.6 million required by
the time the phase-2 construction completes and provides Ashesi with 800 students‘
capacity in the new premises.
         Capacity in current place: 400 students
         Two shifts : 800 students
         Capacity in New place after end of Phase 1: 600 students
         Two shifts : 1200 students
         Combined with current place+ new place: 2000 students

       At the end of phase-2, the student capacity can be extended up to 2400 max.
However, it is suggested not to exceed 2000 given that is the planned maximum future
capacity.
                                            Entrepreneurship – Ashesi University Case Analysis 10


         5. Recommended Solution, Implementation and
                       Justification

        After careful consideration of key decision criteria, mission and future aspects of
Ashesi, the idea of selling a portion of the land acquired or engaging the students on
small industrial projects to generate funds or getting the faculty to cover short
professional course etc., were ruled out as it may have future impact on the mission and
image of Ashesi if it is only performed for generating funds for permanent campus.
Excluding those options will provide us the following five (5) immediately executable
solutions and two (2) future solutions that will help to secure the necessary fund for the
maximum capacity and residency planned.
     Exhi                                                                     Year-2      Year-3      Year-4      Year-5
 #    bit       Immediately Implementable Solution           Year-1 Saving    Saving      Saving      Saving      Saving
                            Total Fund Needed for Construction -28,600,000
     10 in
     case
 1   study Board Past + Future Projected Surplus                    750,000                276,379     344,795     231,298
           Additional Income minus expense from Two Shifts
 2    8.9 in old premises (yearly saving)                         1,518,378   1,652,778   1,936,229   2,113,333   2,121,042
           Scholarship Fund from Established Institutions to
 3    8.2 cover Student Aid                                         592,793    654,160     705,708     740,993     778,043
           Loan from Prominent Institution against Land under
 4    8.7 low/nil interest scheme                                 5,000,000
 5   New Engaging a professional fund raising organization         500,000     500,000     500,000     500,000     500,000


                          Future Solutions
         Additional income minus expense from 600
 1   8.8 Students after phase-1 construction * 2 shifts                                   1,800,000   1,800,000   1,800,000
         Rental/Fund raised from Research Lab Facility in
 2   New New Premises for Large Corporations                                               500,000     500,000     500,000


                                                   Total       -20,238,829    2,806,938   5,718,316   5,999,121   5,930,383
             Possible Repayment from savings over 5-year
                                                 period         20,454,758


                                        Nett Fund Required         215,929




5.1 Immediate Solution
         As discussed in section 4 and Ashesi case study, we will be able to use the past
reserves to initiate the first phase of the construction immediately. While the case study
projects it as $2.0 million dollars, a conservative amount of $750,000 is taken as the
initial investment to start work. In addition, given the existing investments in fixed assets
like class rooms, library, computer labs, it may be ideal to consider running two shift
operations with additional faculty to balance the work load. This can be implemented
quickly using Patrick‘s academic network.

       Apart from the above, Ashesi can immediately engage the services of a
professional fund raiser and get them to address cash donation as well as scholarship
arrangements with corporate, large philanthropic establishments, government bodies as
                                   Entrepreneurship – Ashesi University Case Analysis 11


well as individuals. In addition, Ashesi can approach prominent figures and black leaders
to endorse the university and launch a campaign to support their cause.

        Lastly, the university can raise a loan of $5 million from a bank or other NGO
organizations for low interest. As the construction will be approached in phases, the
fundraising can be phased over a five year period to ensure the cash flow is not impacted
in anyway. None of the above are in conflict with Ashesi‘s values and mission and
increasing student capacity by operating in shifts will help achieve the institution‘s goal
of supporting 2000 students.

5.2 Future Solution
         Apart from the immediate solutions identified, Ashesi can address two additional
options to enhance its fund raising capability. Once the first phase-1 of the construction
ends, the university will have capacity to handle additional 600 students. Instead of
shifting existing students from current premises, Ashesi can use this new facility to add
1200 more students in two shifts so that one of its targets of reaching out to 2000 students
can be addressed in less than 24 months instead of waiting for 5 years. In addition, the
institution should use the new permanent premises to establish Research labs for
prominent players within the campus and generate rental income as well as enhance the
association with corporate world.
                                    Entrepreneurship – Ashesi University Case Analysis 12



                                    6. Conclusion


                              Source: www.quotesdaddy.com


         This case has analyzed the biggest challenge faced by Ashesi in greater detail and
provided with several options that can be implemented immediately. However, what
requires immediate and most attention from Patrick and the whole Ashesi family is the
increasing academic ethical issue that they are facing today. As analyzed earlier, the
actions taken by the management and the student society to fix this crucial issue will
define the future of Ashesi and its on-going success in Ghana and rest of the world.
Therefore, the case analysis recommends that the Student committee accept the
suggestion of establishing an academic ethics honor code similar to professional ethics
practiced in the business world. An institution wide communication and pledges during
important milestones to remind the student community will help them to link themselves
to this budding great institution‘s goals and the unique approach that it is taking to every
aspect of education. In addition, the management team should quickly implement the ‗no
proctor‘ policy so that it sends a strong message to the Ashesi student community as well
as to rest of the world about the uniqueness that Ashesi enjoys and the quality of students
that it produces More importantly, it will remind students the level of trust and personal
responsibility entrusted on them in establishing a fair and ethical learning society. If this
approach combined with all the above suggested solution for fundraising, it will make
Ashesi an incomparable brand and bring all the help that it needs and more to its door
step.
                                  Entrepreneurship – Ashesi University Case Analysis 13


                                7. Bibliography
Bhide, A. (1999) Harvard Business Review on Entrepreneurship: The Question Every
Entrepreneur must answer. Boston: Harvard Business School Publishing. pp. 3.


Bhide, A. (1999) Harvard Business Review on Entrepreneurship: Bootstrap Finance –
The Art of Start-ups. Boston: Harvard Business School Publishing. pp. 153.


East Legon Prime Location Land for Sale (2007). Center for Creative Leadership,
Leadership Gap [Online] Available from:
http://www.homesonsale.co.uk/east_legon_prime_location_land_for_sale_200x100-
o53298-en.html
 [Accessed 04 March 2010]


Harsch, E. (2000). Ghana grapples with university fees [e-journal] 14 (2). Available
from:
http://www.un.org/ecosocdev/geninfo/afrec/vol14no2/july00.htm
[Accessed 04 March 2010]


UNCF – Who we are: Fund Raising Efficiency (2008). [Online]. Available from:
http://www.uncf.org/aboutus/aboutFacts.asp
[Accessed 04 March 2010]
                                  Entrepreneurship – Ashesi University Case Analysis 14


                                     8. Exhibits
8.1 2002-07 Donor Support / Fund Raising Trend
       Chart below shows the declining trend of Donor support received/Fund raised
form 2002 to 2007.

                                 Donor Support/Fund Raised


  700,000
  600,000
  500,000
  400,000
                                                                 Donor Support/Fund Raised
  300,000
  200,000
  100,000
        0
          02

          03

          04

          05

          06

          07

          08

          09

          10

          11

          12

          13
       20

       20

       20

       20

       20

       20

       20

       20

       20

       20

       20

       20




8.2 2005-07 Financial Aid to Students & 2008-13 Projection
       Chart below shows the increasing trend in financial aid spent in 2005-07 and the
trend being upheld in the projection as well. The university can channel this into building
and other growth aspects if it manages to get large foundations to support them as student
scholarships

                                  Financial Aid to Students


  900,000
  800,000
  700,000
  600,000
  500,000
                                                                   Financial Aid to Students
  400,000
  300,000
  200,000
  100,000
        0
           02

           03

           04

           05

           06

           07

           08

           09

           10

           11

           12

           13
        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20




                                   Year
                                       Entrepreneurship – Ashesi University Case Analysis 15




8.3 2002-13 Tuition Fee & Other Income Trend

        The below chart and table provides a view on income generated from Tuition
Fees from 2002 to 2007 and projected from 2008 to 2013. Both Tuition fee and other
income are on continuous rise.

                                       Tution Fees Trend

        3,000,000
        2,500,000
        2,000,000
                                                                                     Tution Fees
   U$




        1,500,000
                                                                                     Other Income
        1,000,000
         500,000
               0
                    2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
                                               Year




8.4 2008-13 Expense versus Student Strength Trend

       The below chart and table plots the projected Total Expense in U$ in the case
study against a year on year students strength increase of 30% capped at 2000 and
analyses the actual expense per student trend.

                                    Expense/Student Trend

  10,000,000
   1,000,000
     100,000
                                                                          Expenses in U$
      10,000
                                                                          Students
       1,000
                                                                          Expense/Student in U$
         100
          10
           1
               02

               03

               04

               05

               06

               07

               08

               09

               10

               11

               12

               13
            20

            20

            20

            20

            20

            20

            20

            20

            20

            20

            20

            20




                                        Year
                                   Entrepreneurship – Ashesi University Case Analysis 16




8.5 2008-13 Tuition Fee versus Student Strength Trend

       The below chart and table plots the projected Total Tuition Fee in U$ in the case
study against a year on year students strength increase of 30% capped at 2000 and
analyses the actual spend on tuition fee per student.

                               Tution Fee/Student Trend

  10,000,000
   1,000,000
     100,000
                                                                          Tution Fees in U$
      10,000
                                                                          Students
       1,000
                                                                          Fee/Student in U$
        100
         10
          1
             02

             03

             04

             05

             06

             07

             08

             09

             10

             11

             12

             13
          20

          20

          20

          20

          20

          20

          20

          20

          20

          20

          20

          20




8.6 2008-12 Tuition Fee Projection

        Exhibit 10 in case study provides a view on increasing fee structure as projection.
A further analysis with Tuition Fee Projection highlighted in above exhibits will show
that the number of students has been assumed to be a max of 412 for the period 2009-12
in the case study.




8.7 Alternate Option -1: putting all assets into full use

       Selling a portion of the land, taking a secured bank loan, expediting the increase
in students‘ capacity from current projection of 412 to 2000 in 5 years time and
aggressively getting students aid covered by established institutions will turn the
university profitable in 5 to 6 years time.
                                    Entrepreneurship – Ashesi University Case Analysis 17




      Description of Items                                                  Amount in $
      Total Capital Required for 2000 pax capacity in 4 to 6 years           -28,600,000
      Raised by land sale of 50 Acres                                          5,000,000
      Savings from Financial Aid (Exhibit 8.2)                                 4,000,000
      Loan on land                                                             4,000,000
      Potential Yearly Fee from increased student population with
      additional space (800 in 2 years - addnl 400 as per Exhibit 8.6) @
      $6000/per student                                                         900,000
      Potential Yearly Fee from increased student population with
      additional space (1200 in 4 years - addnl 800 as per Exhibit 8.6) @
      $6000/per student                                                       2,100,000

      Potential Yearly Fee from increased student population with
      additional space (1600 in 5 years - addnl 1200 as per Exhibit 8.6)
      @ $6000/per student                                                     3,300,000

      Potential Yearly Fee from increased student population with
      additional space (max 2000 in 6 years - addnl 1600 as per Exhibit
      8.6) @ $6000/per student                                                 4,500,000
                                      Net Cash Flow at the end of Year-6      -4,800,000

             Subsequent Annual profit potential from 2000 Students
           Tuition Fee minus Operating Expense@$3000/per student              6,000,000


8.8 Alternate Option -2: Funding from alternate sources

       Increasing the students‘ capacity by 400 seats every year will bring in additional
$ 600,000 to $1,000,000 in net operating surplus for every additional 400 students. This
can be channeled towards building fund. In addition, the university will also save the
300,000 that is currently being spent towards rental, which can also be redirected towards
building funds.
          Savings from Real Estate : $300000*5 = $1.5 million
          Savings from Additional capacity: $600000 *4 = $2.4 million


     Description of Items                                                   Amount in $

     Potential Yearly Fee from increased student population. 800 @
     $6000/per student minus operating expense @$4500/per student              1,200,000
     Potential Yearly Fee from increased student population. 1200 @
     $6000/per student minus operating expense @$4500/per student              1,800,000
     Potential Yearly Fee from increased student population. 1600 @
     $6000/per student minus operating expense @$4500/per student              2,400,000
                                  Entrepreneurship – Ashesi University Case Analysis 18


     Description of Items                                             Amount in $
     Potential Yearly Fee from increased student population. 2000 @
     $6000/per student minus operating expense @$4500/per student       3,000,000


8.9 Alternate Option -3: Running two shifts

        As shown in the table below, Ashesi can generate additional $11 million dollars
over 6 years if it runs two shifts covering 400 students in each using the current
infrastructure and additional faculty.

				
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